This article is posted with the permission of the author, Lydia Chan.
After her Mother was diagnosed with Alzheimer’s, Ms. Chan struggled to balance the responsibilities of caregiving and her own life. She founded AlzheimersCaregiver.net as an online resource for fellow caregivers and seniors. In her spare time, Lydia writes articles about a range of caregiving topics.
Financial Planning for Alzheimer’s Disease
Alzheimer’s disease is a debilitating illness that largely affects seniors. The cause of the disease is unknown; what we do know is it is a degenerative neurological disorder in which the death of brain cells causes cognitive issues including memory loss and mental decline. Alzheimer’s is the most common type of dementia making up 60 to 80 percent of all cases in the United States. Five million Americans had Alzheimer’s disease in 2013 and that number is expected to double by 2050.
At first, Alzheimer’s symptoms are mild and a patient can continue living on their own with minimal supervision and care. However, symptoms of Alzheimer’s become more severe with time. These symptoms include:
- Language difficulties
- Memory loss
- Problems with attention
- Loss of orientation
- Mood swings
- Personality changes
- Impaired movement
- Depression, anxiety, irritability, or apathy
- Low energy
- Inability to recognize others
- Loss of bodily control
Covering the Costs of Alzheimer’s
Because the symptoms of Alzheimer’s get worse with time, patients eventually need long-term health care in addition to their normal medical routines. While the federal insurance program Medicare covers many medical expenses for seniors, it is not a comprehensive plan. Even Medicare Advantage plans, like those offered by insurance companies such as Humana, do not cover many costs associated with Alzheimer’s. While Advantage plans offer additional benefits including coverage for prescriptions, dental, vision, fitness services, caregiver support and a 24/7 nursing advice line, they do not cover long-term or custodial care costs.
Because of this, those with Alzheimer’s and those who are at risk must establish alternative funding plans for their long-term care needs.
Selling a Home
For some people, selling their home is the best option for covering the cost of long-term care. This can be a complicated process, one that requires the help of a real estate professional to ensure the home sells for what it’s worth. There are also many important documents that are required to sell a home, which the seller will need to assemble before closing. However, selling the home can help cover the cost of long-term care, so it’s worth the time and effort it takes to put a home on the market.
Seniors with life insurance policies can sell them for a cash payout that can be used to cover health care costs associated with Alzheimer’s disease. Selling this kind of insurance policy is a transaction called a life settlement and can be done through a trustworthy broker. Many seniors choose to sell their life insurance policies once they no longer have to worry about protecting their loved ones against income loss. Life settlements are also convenient for those who can no longer afford — or simply no longer wish to pay — for monthly or annual premiums. It’s also a popular option for people who want to supplement their retirement savings with term life settlement policies that are about to expire.
Long-Term Care Insurance
Long-term care insurance policies are specifically developed to cover the high costs of custodial care. However, these policies are pricey, especially if you wait until later in life to invest in one. Furthermore, once an individual is diagnosed with Alzheimer’s, they are no longer able to apply for long-term care insurance coverage. So those who already have a diagnosis must find alternative means of funding for care.
Health Savings Account
A Health Savings Account (HSA) allows individuals and families with high-deductible insurance plans to squirrel away cash for health care costs tax-free. Health savings accounts earn interest and funds can be withdrawn for various uses as long as they are healthcare-related. A big advantage of HSAs is that funds remain accessible to account holders at all times and can even be used for non-health care related purposes — they simply have to pay taxes on the amount if done.
Alzheimer’s disease has many difficult symptoms that make it impossible for the patient to live on their own in the later stages. Because Medicare and Medicare Advantage plans lack coverage for long-term care, those at risk for Alzheimer’s must plan to cover these steep costs. If undiagnosed, long-term care insurance is an option — though not a cheap one. Seniors with life insurance can sell a policy for a cash settlement that can be used to pad retirement funds and pay for long-term care needs. Finally, a health savings account is a great option for those with high-deductible insurance plans who want to save for long-term care needs while still having access to their money.
For more information on what you need to know about long-term care, make sure you read the other articles provided by The Long Term Care Guy.